- The Commodity Futures Trading Commission oversees more than $400 trillion in notional value in the swaps market, making crypto's $1.3 trillion market cap seem paltry, yet the agency devoted 47 enforcement actions against the industry in 2023.
- In a year from 2022 to 2023, the CFTC cranked up its crypto case load from 20% to 49%.
Half of the 2023 sanctions from the U.S. Commodity Futures Trading Commission (CFTC) targeted digital assets companies and individuals, according to the agency's annual enforcement snapshot released on Tuesday.
The opening section of the report boasted that "the CFTC cemented its reputation as a premier enforcement agency in the digital asset space." The U.S. derivatives regulator, which has authority over fraud and manipulation in the crypto markets, filed 47 actions in fiscal year 2023 against the crypto industry that represents a tiny fraction of the trading the regulator oversees.
The CFTC listed ongoing cases such as its pursuit of FTX and former CEO Sam Bankman-Fried, who was convicted in his related criminal case but hasn't yet received a sentence; Binance and founder Changpeng Zhao; and the action against Celsius and ex-CEO Alex Mashinsky (who also faces criminal charges).
The agency also "obtained a first-of-its-kind litigation victory against a decentralized autonomous organization" when a court found that Ooki DAO could legitimately be sued as an unincorporated association and be held responsible for breaking the law.
CFTC Chairman Rostin Behnam praised his enforcement division's "groundbreaking work in the digital asset space, which resulted in a record number of cases, as well as staff’s dedication to holding registrants and market participants accountable for their conduct in CFTC regulated markets."
In recent years, Behnam's agency has routinely been held up in crypto circles as the preferred U.S. regulator. Industry insiders have suggested its handling of digital assets is much more reasonable than its sister agency, the Securities and Exchange Commission (SEC.) But while the CFTC's reach and staff may be more limited than the SEC's, its enforcement preferences reveal that crypto is in its crosshairs.
Last year, about 20% of the CFTC's cases involved crypto, and this year it's 49%.
Crypto lobbyists and the industry's allies in Congress – typically among Republican lawmakers – have advocated that the CFTC be given more power, especially a direct regulatory authority over the crypto spot markets where actual crypto assets change hands. That could put the agency in a more dominant crypto role than the much larger SEC.
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